A report from Bespoke Investment Firm suggests the promising S&P 500 Energy Sector is on a losing phase in a span of 40 years. This is the third time, a fall of about 23.7% is calculated in a 10 day trading period.
The S&P 500 Energy industry has shown profits this year. It is the only sector that has brought growth in the broad-market index. But due to a pull back in the prices of the oil, the companies are having a rocky road ahead. In the last 40 years of operation, the industry is currently facing huge losses in a third wave.
A significant decline of 23.7% is recorded in a 10 day tenure of trading. Bespoke Investment shared the concern in their Twitter handle that the 23.7% decline has taken the trading to the times when Russia invaded Ukraine back in February, 2022.
The other two times the energy sector harnessed losses was once in 2008 due to the market crash and the another in March 2020, when the COVID-19 pandemic struck the face of the earth.
Companies like Exxon Mobil and Chevron saw a reduction of about 5% in the sector of oil heavyweights. When Russia invaded Ukraine, the supply of the product made the price skyrocketed in the global market, since Russia is one the world’s top producers of oil.
The Oil and Energy industry got profits more than 40% in the 200 day average during the invasion. This was last seen in the 1990s in this sector for the 200-DMA. Several investors have pulled down the prices of oil to address the upcoming recession in the banks. They have also increased the interest rates to tackle the rising inflation. The United States President, Joe Biden also asked the Congress to halt taxes on oil for three months in order to provide some relief to the consumers. As a result, the oil prices have dropped significantly causing tension in the energy sector.
